Other biofuel companies are planning IPOs, so, hey, why not Range Fuels? Well, one potential issue is the newness of the company’s technology. Unlike the more traditional ethanol process that uses enzymes, Range Fuels uses a thermochemical process to turn biomass into synthetic gas and then fuel. Manditch says the catalyst the company uses for the conversion process is proprietary, but he assures us that the process has significantly lower capital and production costs than enzymatic cellulosic ethanol.

The company’s technology may be cutting edge, but Range Fuels is already set to break ground on its first plant in Georgia this summer that will use wood by-products to produce biofuel. Mandich says the company’s fuel will be cost-competitive to corn-based ethanol from day one; the same cannot, he points out, be said of enzymatic cellulosic ethanol. “Ethanol is a commodity, priced by corn today,” he says, and any biofuel that will be competitive in the marketplace will have to offer a similar price.

Researchers at University of Minnesota are working on a similar process of converting biomass waste into ethanol through synthetic gas conversion. Using converters and the precious metal rhodium, the researchers were able to convert biomass in 70 milliseconds. When I asked how Range Fuels’ technology compared, Mandich said that while the university researchers’ process may be successful in a lab environment, the commercial market viability for using rhodium is unproven.

The funds the company is looking to raise will go toward building the plant, which will cost “hundreds of millions of dollars,” according to Mandich. Depending on when the cellulosic ethanol plant gets up and running, it could be the country’s first. Range Fuels has already raised an undisclosed amount of money from Khosla Ventures, and has received $75 million through a grant from the Department of Energy.

When I asked Mandich how important he thinks federal funding is for clean-tech startups, he said it’s very important for the early stage of a company when the technology is not yet proven and investors are hesitant to invest. But, he said, “The funding needs to be short-lived. Once the technology has been proven to scale, the free market economy can take it from there.”